The Relationship between Salary Packages and Employee’s Subjective Well-being: Evidence from Service-based SMEs in Pakistan

An excellent package of salary plays very important role in the management of the talented people of the organization because such packages bring positivity in the feelings, behaviors and in the satisfaction of the people. The objective of this study is to test the hypotheses to investigate the relationship between salary packages and employee’s subjective well-being. The study employed a quantitative methodology. Data were collected through a self-administered survey questionnaire. The questionnaire was adapted from a previous validated survey. The target population consisted of SMEs operating in the city of Quetta, Pakistan. Convenience sampling was applied to collect data from service-sector SMEs. A total of 486 questionnaires were distributed. Of these, 380 were received. However, 349 questionnaires were finally considered as useable. The results of correlation and regression analyses indicate that salary packages have significant positive impact upon employee’s subjective well-being. Our study indicates that when an organization implements practice of excellent and attractive salary packages then such practices develop a realization of trust among the employees which bring positivity in their feelings and behaviors and this will develop their belonging and satisfaction towards the organization. This study also suggests that the top management should continuously monitor the structure of salary in the organization and devise such kind of salary structure which gives recognition to the competent talent of the organization.